Kilroy Realty Corporation (KRC) recently announced that it has completed the acquisition of ‘690 E. Middlefield Road’ – a prime property in Mountain View, California. Kilroy Realty intends to develop a 341,000 square-foot office campus on the acquired property. The company will also manage the office campus, which will be under a 15-year lease agreement with Synopsys, Inc. (SNPS) – a leading electronic design automation company.
Kilroy Realty expects the investment in the entire project, including the cost of land, to be approximately $200 million.The campus will consist of two five-storey Class A office buildings with state-of-the-art infrastructure and is expected to be completed in the first quarter of 2015.
With this project, Kilroy Realty has expanded its development franchise in one of the most attractive submarkets in the Silicon Valley. The property is strategically located adjacent to Highway 237 with direct access to both Light Rail and Caltrain.
With this acquisition, Kilroy Realty seeks to employ the knowledge and expertise of its management team to extend its presence in new West Coast submarkets that have long-term demand and high barriers to entry.The company is further expanding its presence in coastal San Diego, where it already enjoys market-leading positions in the major coastal submarkets from Del Mar and Sorrento Mesa east to the I-15 Corridor.
With the completion of this project Kilroy Realty’s Bay Area commercial real estate portfolio will surge to approximately 3.0 million square feet, out of which 2.1 million square feet is located in the vibrant South of Market (:SOMA) district in San Francisco.
Kilroy Realty is a real estate investment trust that engages in investment, development, and management of real estate properties. Kilroy Realty focuses on maintaing a conservatively managed balance sheet, and an expansion program that include acquisitions or development depending upon specific opportunities.
Kilroy Realty currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We have a long-term Neutral recommendation on the stock.
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